School of Business
Primary Subject Area
Business Administration, General
Business Law, Public Responsibility, and Ethics | Corporate Finance
The purpose of this study is to evaluate the arguments concerning corporate social responsibility (CSR). The two sides of the debate are stakeholder theory and shareholder theory. Proponents of stakeholder theory support providing for the discretionary expectations of society. On the other hand, advocates of shareholder theory maintain that businesses should simply obey the law and maximize shareholder wealth. Although CSR is enthusiastically espoused by many social progressives, it is not a panacea for society’s ills. The conclusion of this study is that corporations should focus on legally maximizing shareholder wealth based on ethical principles. CSR should only be pursued if doing so accomplishes this function.